In the United States, annual healthcare waste — from failure of care delivery to overtreatment — ranged from $760 to $935 billion, according to the Journal of the American Medical Association. But wearable healthcare technology is poised to overturn these trends. New laws that allow doctors to embrace innovations in wearable diagnostic and assistive devices could help usher in a new era precision medicine that reduces medical costs and saves thousands of lives.

“Studies have shown that folks using these types of devices are more engaged in their own health than those that are aren’t,” says Michael Wittman, program manager at Northrop Grumman Information Systems in McLean, Virginia.

Fitness Trackers Grow Up

Today’s wearable healthcare technology has its origins in old-school pedometers that could count the number of steps a person took each day. Activity trackers began to crop up in the late 2000s, like wristbands that wirelessly connected to a smartphone app. In addition to tracking steps, most of these consumer devices were capable of sensing heart rate, sleep patterns and flights of stairs climbed. The data they collected was informative, but it wasn’t detailed enough to feed a medical diagnosis.

Things started to shake up in 2018. Apple introduced its Series 4 Watch, which had the ability to take an FDA-approved electrocardiogram (ECG) and share it with a doctor. The medical diagnosis door was cracking open for wearable healthcare technology, but one detail stuck. Even if a doctor could receive medical-quality data, they weren’t able to bill an insurance company for any service related to it. The situation would be similar to a doctor making a medical recommendation based on the result of an MRI, but not being able to bill for it.

The Centers for Medicare & Medicaid Services (CMS) saw the problem and enacted changes in January 2019, says Pete Ianace, senior vice president of corporate development at VitalTech in Dallas, Texas. They released a handful of insurance codes doctors could use to bill Medicare for services tied to wearable diagnostic and assistive devices.

For instance, says Ianace, if a doctor writes a prescription for a Medicare advantage patient to wear a health monitoring band, Medicare will pay the doctor $65/month for as long as the patient wears the device. If the doctor or a nurse in that office spends 20 minutes per month reading the data, the doctor can bill $54. If the patient sends a photograph of, for instance, a rash that could be a side effect of medication, the doctor can bill $13. The list goes on because starting in January 2020, CMS is adding more codes.

“The doctor today who is burned out now has the ability to do remote care, from telehealth to remote monitoring, and essentially add a million dollars of revenue per year to a single practice — and, by the way, end up with better patient health outcomes,” says Ianace.

Precision Medicine in the Making

Wearable medical devices being developed not only track activity, including heart rate, steps and calories burned but also have sensors that pick up vital signs, such as respiration rate, blood-oxygen levels and irregular heartbeats. At-risk patients, such as elderly people with diabetes, asthma, chronic obstructive pulmonary disease (COPD) and heart irregularities have a lot to gain from these wearables. A medical-quality gadget can be programmed with a patient’s baseline biometrics as well as their prescription regime and send regular updates to a doctor automatically. If a patient’s usual activity or biometric indicators move outside normal ranges, the system can send an alert to a phone app owned by the patient or to a family member.

Healthcare technology advances will improve disease treatment and prevention by taking into consideration an individual’s medical history, environment and lifestyle. If a person with diabetes has a blood-sugar level that gets too high, for instance, a medical device can issue a warning that they need to adjust their medication. If air quality is poor on a hot summer day, the device could warn a patient with asthma to take precautions or stay inside. Healthcare wearables can remind people to take specific medication at specific times, detect falls and serve as panic alerts that connect users to immediate assistance.

In response to the potential of wearable healthcare technology, the market is exploding. According to Wareable, market analysts from Gartner have estimated that spending on wearable products, including smartwatches, will rise from $41 billion in 2019 to $52 billion in 2020. That trend is already underway. At the end of October 2019, Optum, a division of the insurance giant United Healthcare, acquired Vivify Health, a patient-monitoring platform, reported CNBC. And just a few short days later, Google announced that it had purchased Fitbit, the health fitness wearable.

Use With Caution

As with any emerging field, especially one that impacts the health and well-being of a patient, there will be challenges.

In an essay published in the Journal of the American Medical Association, physicians from Harvard Medical School, Beth Israel Deaconess Medical Center and the Massachusetts General Hospital offer a word of caution about healthcare technology advances with wearable devices.

In a summary provided by the American Medical Association, the study’s authors write that although insurance companies have begun to reward policy holders for healthier activity, calorie intake, blood pressure and weight tracked by wearable devices, these companies could begin to penalize less healthy people with higher premiums because there are no regulations to stop them. The physicians also warn that inaccurate data collection could unintentionally result in penalties or harmful treatment. For instance, if a device records activity levels much lower than the person produced, the numbers could reduce insurance premium rewards. Or, if a device yields false-positive readings, doctors could potentially recommend treatments that are harmful.

They also point that patients who cannot afford wearable devices and who aren’t covered by Medicare may not be able to participate in incentive programs. They would miss out on insurance rewards, and more importantly, health benefits that the technology offers.

Lastly, the physicians write that the data from digital health devices could be intercepted by third parties and used in inappropriate ways. Data collected by a wearable device is not protected by the Health Insurance Portability and Accountability Act, the physicians said.

Wittman says that in order to increase adoption and to be able to use the technology from a clinical standpoint, tech companies have to make devices that produce medically relevant data. Strong guidance from the FDA can help make medical wearables reliable and accurate. But it may simply take some time.

“I think you’re going to see more and more devices approved for home use as the technology matures,” says Wittman.